Mondelez Says Wary US Shoppers Are Cutting Back on Snacks
Revenue Falls Short of Expectations
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Mondelez International Inc. posted slower-than-expected sales growth as worries about inflation and the economy push U.S. consumers to prioritize essentials over cookies, crackers and sweets.
The owner of the Oreo, Ritz and Cadbury brands said organic revenue, which excludes currency changes and other items, rose 3.1% in the first quarter, short of the 3.5% that analysts had projected. Sales in North America unexpectedly fell while other regions saw gains.
鈥淚 really do not expect to see a significant improvement in consumer confidence in the near term in the U.S.,鈥 CEO Dirk Van de Put told analysts on the company鈥檚 earnings call.
Mondelez ranks No. 65 on the听Transport Topics Top 100 list of the largest private carriers听in North America and No. 9 among听agriculture and food processing carriers.
Mondelez has been one of the best performing packaged-food stocks this year, with shares up about 10% through April 29.
But President Donald Trump鈥檚 trade war has made Americans increasingly pessimistic about prospects for the economy and labor market, and many are curbing their spending as a result. Mondelez said it鈥檚 seeing shoppers prioritize meat, vegetables and eggs over more indulgent categories like snacks. Lower-income shoppers are also switching to smaller packages while higher-income consumers opt for larger value packs.
The company raised prices to offset elevated cocoa costs, and that has helped to offset a decline in volumes. As U.S. consumers demonstrate 鈥渃ontinued frustration with prices,鈥 the company said it鈥檚 launching more affordable products to match what shoppers are now willing to pay.
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鈥淭wo, three years ago consumers would easily pay above $4 for a pack of biscuits,鈥 Van de Put said. 鈥淲e鈥檙e now seeing that we need to be below $4 and ideally below $3.鈥
Mondelez reiterated its full-year guidance, including an expectation that profit will fall about 10% this year on a constant currency basis 鈥渄ue to unprecedented cocoa cost inflation.鈥 The company expects earnings per share growth in 2026.
The guidance doesn鈥檛 reflect any potential tariff changes related to goods that are compliant with the USMCA trade agreement in North America. The vast majority of Mondelez鈥檚 production for the U.S. is either made domestically or compliant with USMCA. A small portion of the company鈥檚 finished goods and ingredients are subject to tariffs, which are factored into the earnings guidance.
